Managing your art collection in a new age

In the last eight months, the art world has evolved more dramatically than in perhaps any other period since World War II. The transition to digital platforms in our industry, long-rooted in social engagement and in-person exploration, has led collectors to fundamentally rethink the way they engage with the art market. Whether selling, gifting and/or donating to a museum, collectors are using this moment to think through planning for their art collections.

Be strategic about buying and selling

If you’re considering buying or selling art, remember how unique the current market cycle is. Collectors have been scouring the globe for discounts, but most have turned up empty-handed. With galleries and art fairs reopening and supply increasing, there may be more opportunities to acquire works at a slight discount. Rather, as the global economy reopens and demand across most segments stabilizes, bargain pricing is not expected to last long.

Stay attentive to business and legal considerations

Paying attention to the business and legal details associated with art transactions has always been important, but in today’s market a few things are more important: 

• Do your due diligence when selecting a gallery or auction house, sale strategy, and seller terms
• Mitigate risk by looking for opportunities to negotiate optionality, such as timing and sale venue
• Consider hiring a fiduciary with a dedicated art services team to do it all for you

Think about art as a source of capital

Art can play a key role in your liquidity strategy. If you choose to hold art due to market conditions, tax reasons or personal enjoyment, you should carefully consider your options, especially if interest rates fluctuate or markets turn volatile

• Many collectors hold their art on the balance sheet and use an art loan as a source of capital to reinvest or to buy more art
• Because art is not priced daily, unlocking capital with an art loan may be less risky than other forms of borrowing

The best part of this approach is that your art stays in your home where you can continue to enjoy it — especially now, when most of our time is spent at home.

Explore philanthropic gifting opportunities

If you’re weighing various philanthropic gifting options to support your favorite cultural institutions: 

• Remember that the ability to deduct cash donations was recently increased to 100% of the adjusted gross income
• Now may be the ideal moment to support beloved art and cultural institutions while receiving an enhanced personal tax benefit

Bank of America continues to support the arts through a variety of programs and partnerships because we believe that the arts matter. As always, our Art Services team will be there for you during TEFAF New York this autumn for exciting works and programming — digitally, of course.

To learn about Bank of America Private Bank’s extensive art services, visit privatebank.bankofamerica.com/Art or call Evan Beard at 646.855.1107.